I completely agree with you. Even though bailing them out was the right decision at the time (because you’d have civil unrest otherwise), what should have followed immediately after that was to break all banks into smaller, resilient banks.
In such a system individual banks go bankrupt with some frequency but the system overall is healthy as banks compete with each other.
What we have now is unhealthy and subject to bloat and eventual blowup.
Where do you escape to when the whole world is affected by Fed’s decisions?
Yep. You move to an alternative system which isn’t subject to the same structural risks.
Crypto may be volatile but structurally it has less risk. Along with banks I’d also add large tech companies in this space, adding to this level of instability.
Timing economic downturns is a hard thing to do. No one knows what triggers them but when the next one comes, the Fed might have exhausted all its options.
That’s when things get ugly.